4. CBDC Systems Engineering

This chapter delves into the foundational technologies underpinning Central Bank Digital Currencies (CBDCs), offering a comprehensive analysis of the systems engineering involved in deploying sovereign digital currencies that are secure, scalable, and efficient. It explores the core operational models of CBDCs, including centralized, decentralized, and distributed ledger systems, and assesses the role of blockchain and other distributed ledger technologies (DLT). The chapter also investigates enabling technologies such as smart contracts, AI-driven security measures, and post-quantum cryptographic methods, with a particular focus on their integration into CBDC systems. Additionally, it examines the energy efficiency of CBDCs compared to traditional banking and cryptocurrencies, highlighting the potential for significant energy savings. The chapter concludes with a forward-looking analysis of cross-border interoperability and the evolving global architecture of digital public finance, providing frameworks for understanding CBDCs not as abstract policy instruments, but as engineered financial systems.